“What happened with Microsoft was clear”: Former Square Enix exec says Game Pass, “a service with barely any growth,” didn’t cause layoffs – competition with AI did
Jacob Navok – the CEO behind Silent Hill: Ascension streamer Genvid, and former Square Enix business director – believes that Microsoft’s latest round of crushing layoffs came from a power struggle with AI technology that’s currently reshaping the entire video game industry.
“The game industry is facing a fundamental realignment,” Navok writes in a lengthy Twitter thread. “This is not a passing storm. It is a change in the forces that stitched the industry,” which is now being held together by the more individualistic, flexible experiences offered by platforms like Roblox, Fortnite, and GTA Online.
While Navok rejects the idea that Roblox could ever fully supplant a more determinate video game – the fixed pathways of Dark Souls or something – “in the same way that movies or television did not go away with the advent of YouTube,” he believes Microsoft Gaming CEO “Phil Spencer is staring down the barrel of an industry that’s changed drastically since he greenlit Perfect Dark’s reboot.”
This does not mean games go away, in the same way that movies or television did not go away with the advent of YouTube.But we are fighting for time; time does not increase. Tiktok increasingly taking up time that once belonged to more casual play. Hardcore players are aging…July 8, 2025
“Enter AI,” Navok continues. “What happened with Microsoft was clear: AI is a one-in-a-generation change in the entire digital order.” He’s preparing for a day when PCs are littered with “Roblox-like platforms built with AI prompts where kids just enter the type of entertainment they want.”
Those both in favor of AI creeping into all parts of the day and those terrified of the possibility have warned of a similar future for decades; French philosopher Jean Baudrillard even defined the idea of a “hyperreality” with no real-life origin in the ’80s. Still, virtual reality tech like the Oculus Rift has never gotten close to being a replacement for old-school flesh and blood.
But Navok thinks that, when it comes to our currently more lightweight and convincing generative AI tech, Microsoft “must either get on board, or perish.”
“Don’t be misled […] that the industry’s problems can be chalked up to Game Pass, a service with barely any growth the last few years,” he says. “The platforms with the most creators and players generate the most value.”
Microsoft reportedly doesn’t include lost first-party game sales when calculating Xbox Game Pass profits, but the subscription service is apparently earning money regardless.
